U.S. adds 209,000 jobs in July to keep hot streak intact

WASHINGTON (MarketWatch) — The U.S. in July gained more than 200,000 jobs for the sixth straight month, signaling the economy is likely to sustain its momentum through the summer months.

The economy added 209,000 jobs last month outside the farm sector, the Labor Department said Friday. Although hiring tapered off after a 298,000 gain in June, the U.S. has generated at least 200,000 jobs in six straight months for the first time since 1997.

“The labor market came off its hard boil in July, but it continued to simmer,” said Scott Anderson, chief economist at Bank of the West in San Francisco.

Every major sector of the economy added jobs and hiring was particularly strong in the professional ranks, construction and manufacturing — all sectors that pay above the average national wage.

The unemployment rate, meanwhile, rose slightly to 6.2% from 6.1% despite another strong month of hiring, according to government data. More people entered the labor force in search of work to push the rate higher, but that’s usually a good thing. It’s typically a sign that people think more jobs are available.

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wavered and were slightly weaker, coming off a day in which the Dow Jones Industrial Average sank by 317 points. Economists polled by MarketWatch had expected a 235,000 increase in new jobs last month.

In the first seven months of 2014 the economy has gained an average of 230,000 jobs. That’s the best stretch of job creation since the recession ended in mid-2009 and 19% faster than the pace of hiring in 2013.

Nor does it look like businesses are about to hit the brakes on hiring. The nation’s largest small-business lobbying group, for instance, said employment has risen 10 straight months for the first time since 2006. And a weekly report that tracks how many people apply for jobless benefits recently hit a 14-year low.

The acceleration in hiring has fueled renewed optimism that the U.S. is ready to experience a more rapid phase of expansion after years of agonizingly slow growth and a prolonged period of high unemployment.

Yet the July employment report wasn’t entirely positive. Wages barely grew, for instance, and there was little change in the number of people who’ve been out of work for at least six months or who can only obtain part-time work. Sluggish wage growth is a big reason why the economy continues to grow well below its historical average of 3.3% a year.

Inside the report

In July, companies that employ professionals in areas such as technology and administration were the leaders in job creation once again. Business services added 47,000 new positions, though about one-fifth were temp positions.

Average hourly wages, however, rose just a penny to $24.45. They have risen 2% over the past 12 months, but that’s unchanged from the start of the year. Analysts say wages have to rise much faster to speed up an economy that has grown at a lackluster 2% annual pace since 2011.

The number of hours people work each week, another telltale sign of economic progress, was unchanged in July at 34.5. Hours worked are at a postrecession high but still a touch lower compared to prerecession levels.

Even with hiring on the upswing, millions of Americans still can’t find work or they have to work part-time to get by.

The number of long-term unemployed — those without a job for six months or longer — was virtually flat at 3.2 million. The number has been falling steadily since hitting an all-time high of nearly 7 million a few years ago, but it’s still markedly higher than the previous precession record.

Some 7.5 million Americans also say they can only find part-time jobs. That’s also much higher than the historical average.

The so-called U6 unemployment rate that includes people who can only find part-time work and those who recently gave up looking rose to 12.2% from 12.1%.

The labor force participation rate, meanwhile, climbed a tick to 62.9%, the first increase in four months. The participation rate reflects the percentage of people who hold a job or are looking for one.

Employment gains for June and May were revised up by a combined 15,000, the Labor Department said.

Some 298,000 new jobs were created in June, up from a preliminary 288,000, based on newly available data. May’s gain was revised up to 229,000 from 224,000.

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